Asked by Shauna Shirk on Jul 07, 2024
Verified
Investors who take long positions in futures agree to __________ of the commodity on the delivery date, and those who take the short positions agree to __________ of the commodity.
A) make delivery; take delivery
B) take delivery; make delivery
C) take delivery; take delivery
D) make delivery; make delivery
E) negotiate the price; pay the price
Long Positions
Investing strategy where an investor buys a security with the expectation that it will increase in value.
Short Positions
An investment strategy where an investor sells borrowed securities with the intention of buying them back at a lower price to profit from a price decline.
Delivery Date
The specific date on which the delivery of the commodities, securities, or other assets is scheduled to occur in a contract.
- Differentiate between engaging in long and short positions in the sphere of futures trading and understand their outcomes.
Verified Answer
VS
Vinay SreedharaJul 07, 2024
Final Answer :
B
Explanation :
In futures trading, taking a long position means agreeing to buy (take delivery of) the commodity at the contract's expiration, while taking a short position means agreeing to sell (make delivery of) the commodity.
Learning Objectives
- Differentiate between engaging in long and short positions in the sphere of futures trading and understand their outcomes.